DEALS FOR LAND ARE PICKING UP

Published: Monday, January 21, 2013 at 1:00 a.m.

Last Modified: Sunday, January 20, 2013 at 10:48 p.m.

Staff Writers

Facts

MAP:

Significant land sales in the area in December. 4AONLINE: Stay up to date on real estate industry news at heraldtribune.com/insiderealestate.

Raw land sales -- shoved to the back shelf in the real estate market by the Great Recession -- are now coming on strong, fueled by home builders scrambling to get a share of a resurgent new home market.

Last year ended with a spike in raw land sales throughout Southwest Florida, leaving some market observers to wonder whether distressed property deals are history and to predict significantly higher prices are on the horizon.

"I think we are about to get back into another tremendous sellers' market," said Bob Richardson, a longtime land buyer and founder of the Sarasota-based Richardson Group, a real estate firm.

"If you look at raw land, the bottom feeders and vultures have pretty much bought as much as they possibly could, and there is not much of the distressed stuff left. "I think we are getting ready to go into a rapidly appreciating market again."

Already, there is some evidence that downturn buyers are selling -- and making money at it.

Big buyer turns seller

Starwood Land Ventures LLC has bought residential land plots since the gloomy, recessionary days of 2007, when residential prices began a long, steep decline after years of appreciation.

The Lakewood Ranch-based company did its deals on a grand scale, netting 17,000 lots in three states -- Florida, Colorado and Arizona -- with the heaviest buying in 2008 and 2009.

About half, or 8,500 lots, were here in the Sunshine State, and Starwood began doling out the properties to home builders in 2010.

Starwood is still on the look-out for good deals but buying has slowed, Moser acknowledges.

"We have seen such a dramatic recovery. Our last acquisition was in December 2011," Moser said. "That was a Florida golf course community. We've been in a dry spell since then."

For future buying, he sees Starwood using its size to its advantage.

"Some builders will not want to spend $30 to $50 million on one deal, so that is what we will do," Moser said. "We will buy things that have appropriate zoning but have some entitlement work left to do."

Like Richardson, Moser said most of the bank-owned, raw land deals "are basically over."

"These land deals now that are trading, for the most part, are solid sellers with some debt on them, and in some cases no debt," Moser said.

The December rush

In Southwest Florida, the buyers in the December rush included big out-of-state builders such as Taylor Morrison, DR Horton and Ashton Woods Homes.

Some of the prices they paid were relatively steep, especially when compared with the transactions that were occurring during the depths of the recession.

Ashton Woods paid about $180,000 per acre for 18.5 acres off Fruitville Road near Interstate 75 in Sarasota County, while DR Horton paid $150,000 per acre for 30 acres in Venice.

Taylor Morrison is simultaneously building two golf course communities, both called Esplanade Golf and Country Club; one is at Lakewood Ranch, the other in Naples.

"We hope to have them golf-ready in the spring of 2014," said Tony Squitieri, vice president of land resources for Taylor Morrison.

Even so, Squitieri said, the Arizona-based Taylor Morrison is still on the prowl for property to build on in Southwest Florida.

"We are always looking for land opportunities," he said. "There are not enough new homes in the inventory. That enables us to grab some new locations, to deliver that inventory."

Among other prominent national builders there is a huge war chest aimed at vacant land.

"The national builders have a lot of money to spend," said Pat Neal, Southwest Florida's biggest locally based home builder and a frequent buyer of vacant property in 2012.

"National and regional builders are working hard to buy land because there is going to be a big boom," Neal said. "We have four people who do nothing but look at buying land."

The migration restarts

The underlying mechanism that will propel the market -- and the continued appetite for raw land on which to build homes -- is a resumption of migration into Florida from the Northeast and Midwest.

"This is the year when more people will be moving to Florida than in the last four years combined," said Mac Martin, who specializes in land sales in DeSoto and Charlotte counties. "It was inevitable. We knew this would start at some point."

"Builders are seeing the pipeline of foreclosed properties has just about dried up," Martin said. "Even asset managers have waiting lists of buyers, and foreclosed properties are not even hitting the market any more."

Neal just paid $111,000 each for 47 lots in Lakewood Ranch's Country Club East neighborhood, or $20,000 more per lot than he paid for land in the same subdivision a year ago.

"Land prices are going up, and pretty soon home prices will be going up, too," Neal said, citing plans to raise his prices at the end of January because costs for drywall, framing labor and concrete also have been rising.

The bottom line is that despite one of the largest economic downturns in state history, there is just not that much well-located residential land available in a large swath of the region, says Richardson, the Richardson Group founder.

The exception is what is controlled by Lakewood Ranch to the east of the highly visible commercial cluster at I-75 and University Parkway.

"Sarasota is an unusual county," Richardson said. "A third of the county is in public lands. If you look at the maps and what is available, there is virtually no vacant land of any consequence north of Laurel Road, so the development is going to be from Laurel Road down to North Port."

<p>Staff Writers</p><p>Raw land sales -- shoved to the back shelf in the real estate market by the Great Recession -- are now coming on strong, fueled by home builders scrambling to get a share of a resurgent new home market.</p><p>Last year ended with a spike in raw land sales throughout Southwest Florida, leaving some market observers to wonder whether distressed property deals are history and to predict significantly higher prices are on the horizon.</p><p>In December alone, builders and developers spent $75 million for land, tucking away 1,360 acres plus 294 building lots from Lakewood Ranch to Punta Gorda, property records show.</p><p>"I think we are about to get back into another tremendous sellers' market," said Bob Richardson, a longtime land buyer and founder of the Sarasota-based Richardson Group, a real estate firm.</p><p>"If you look at raw land, the bottom feeders and vultures have pretty much bought as much as they possibly could, and there is not much of the distressed stuff left. "I think we are getting ready to go into a rapidly appreciating market again."</p><p>Already, there is some evidence that downturn buyers are selling -- and making money at it.</p><p>Big buyer turns seller</p><p>Starwood Land Ventures LLC has bought residential land plots since the gloomy, recessionary days of 2007, when residential prices began a long, steep decline after years of appreciation.</p><p>The Lakewood Ranch-based company did its deals on a grand scale, netting 17,000 lots in three states -- Florida, Colorado and Arizona -- with the heaviest buying in 2008 and 2009.</p><p>About half, or 8,500 lots, were here in the Sunshine State, and Starwood began doling out the properties to home builders in 2010.</p><p>"We sold 1,200 lots in Florida alone last year," said Mike Moser, Starwood's southeast regional president.</p><p>Starwood is still on the look-out for good deals but buying has slowed, Moser acknowledges.</p><p>"We have seen such a dramatic recovery. Our last acquisition was in December 2011," Moser said. "That was a Florida golf course community. We've been in a dry spell since then."</p><p>For future buying, he sees Starwood using its size to its advantage.</p><p>"Some builders will not want to spend $30 to $50 million on one deal, so that is what we will do," Moser said. "We will buy things that have appropriate zoning but have some entitlement work left to do."</p><p>Like Richardson, Moser said most of the bank-owned, raw land deals "are basically over."</p><p>"These land deals now that are trading, for the most part, are solid sellers with some debt on them, and in some cases no debt," Moser said.</p><p>The December rush</p><p>In Southwest Florida, the buyers in the December rush included big out-of-state builders such as Taylor Morrison, DR Horton and Ashton Woods Homes.</p><p>Some of the prices they paid were relatively steep, especially when compared with the transactions that were occurring during the depths of the recession.</p><p>Ashton Woods paid about $180,000 per acre for 18.5 acres off Fruitville Road near Interstate 75 in Sarasota County, while DR Horton paid $150,000 per acre for 30 acres in Venice.</p><p>Taylor Morrison is simultaneously building two golf course communities, both called Esplanade Golf and Country Club; one is at Lakewood Ranch, the other in Naples.</p><p>"We hope to have them golf-ready in the spring of 2014," said Tony Squitieri, vice president of land resources for Taylor Morrison.</p><p>Even so, Squitieri said, the Arizona-based Taylor Morrison is still on the prowl for property to build on in Southwest Florida.</p><p>"We are always looking for land opportunities," he said. "There are not enough new homes in the inventory. That enables us to grab some new locations, to deliver that inventory."</p><p>Among other prominent national builders there is a huge war chest aimed at vacant land.</p><p>"The national builders have a lot of money to spend," said Pat Neal, Southwest Florida's biggest locally based home builder and a frequent buyer of vacant property in 2012.</p><p>"National and regional builders are working hard to buy land because there is going to be a big boom," Neal said. "We have four people who do nothing but look at buying land."</p><p>The migration restarts</p><p>The underlying mechanism that will propel the market -- and the continued appetite for raw land on which to build homes -- is a resumption of migration into Florida from the Northeast and Midwest.</p><p>"This is the year when more people will be moving to Florida than in the last four years combined," said Mac Martin, who specializes in land sales in DeSoto and Charlotte counties. "It was inevitable. We knew this would start at some point."</p><p>"Builders are seeing the pipeline of foreclosed properties has just about dried up," Martin said. "Even asset managers have waiting lists of buyers, and foreclosed properties are not even hitting the market any more."</p><p>Neal just paid $111,000 each for 47 lots in Lakewood Ranch's Country Club East neighborhood, or $20,000 more per lot than he paid for land in the same subdivision a year ago.</p><p>"Land prices are going up, and pretty soon home prices will be going up, too," Neal said, citing plans to raise his prices at the end of January because costs for drywall, framing labor and concrete also have been rising.</p><p>The bottom line is that despite one of the largest economic downturns in state history, there is just not that much well-located residential land available in a large swath of the region, says Richardson, the Richardson Group founder.</p><p>The exception is what is controlled by Lakewood Ranch to the east of the highly visible commercial cluster at I-75 and University Parkway.</p><p>"Sarasota is an unusual county," Richardson said. "A third of the county is in public lands. If you look at the maps and what is available, there is virtually no vacant land of any consequence north of Laurel Road, so the development is going to be from Laurel Road down to North Port."</p>